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SAO PAULO, May 7 (Reuters) - Brazilian homebuilder Gafisa SA on Thursday reported first-quarter profit that beat analyst estimates, helped by sales of completed homes as well as an increase in earnings at its division that targets low-income buyers.
Consolidated net profit reached 31.6 million reais ($10.45 million)in January-March, versus a 39.8 million reais loss a year earlier.
Analysts in a Reuters poll were split on their estimates, with two projecting a 10 million reais loss on average, and four forecasting mean profit of 11.4 million reais.
Gafisa has been working to cut expenses and boost profit margins in recent quarters after rapid expansion into untried regions outside its base of Sao Paulo, Brazil's most populous, industrialized and wealthy region.
The value of new projects launched in the quarter fell 41 percent to 313.6 million reais, while the value of contracts for residential units rose 77 percent to 423.3 million reais.
"Amid the likely continuation of current economic conditions, we expect to take a conservative approach to launch activity throughout the remainder of the year," Gafisa said in the filing to the stock exchange.
The company's Tenda division, which specializes in building homes for low-income earners, posted an 11.4 million real profit versus a 37.5 million real loss a year earlier, mostly due to improved profitability and cost controls in newer projects.
Gafisa bought Tenda in 2008, but a series of budget overruns and canceled contracts led to a management overhaul focused on better spending controls and lower risk. Gafisa plans to spin off Tenda but recently said the process could stretch into 2016.
The company's middle-income division, also named Gafisa, reported a 20.2 million reais profit, from a 2.3 million reais loss a year earlier. Most of the profit came from equity income from a stake in developer Alphaville, while the rest came largely from sales of completed homes.
Gafisa's consolidated adjusted gross profit margin, or the percentage of net sales left over after deducting operating costs, reached 34.5 percent in the quarter from 30.5 percent a year earlier. ($1 = 3.0251 Brazilian reais) (Reporting by Asher Levine; Editing by Christopher Cushing)